Insights from 40 years of Chinese trademark data

What you need to know (in a nutshell)

1. Trademark filing volumes in China have significantly increased in recent years, with over 7 million trademark applications received by the Chinese Trademark Office (CNIPA) in 2018.
2. Chinese brand owners have also increased their activity in foreign markets, filing over 140,000 trademark applications in 2018 outside of mainland China.
3. The rapid growth of trademark activity in China has raised concerns about the quality and examination of the applications being processed.

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Robert Reading from CompuMark found that Chinese trademarks, even though the nation has enjoyed remarkable economic growth, only represent $2 million of GDP in his 1981-2018 assessment.

Trademark laws usually remain consistent throughout someone’s career and fees tend to stay the same or decrease. Additionally, trademark filing numbers often reflect economic trends as they slowly expand with time.

In 1981, the six countries with the most trademark filings were US, China, Japan, France and Brazil. The following decade saw Germany Canada Mexico South Korea Argentina and UK gain ground in this area and become part of the top 15 registers.

Examining the filing numbers from 1981 would be shocking. The USPTO received 34,000 and CNIPA (formerly the Chinese Trademark Office) got 26,000 applications - surprisingly low figures by today’s standards.

Fast forward to 2018, and the data is very different. The USPTO received 440K+ trademark applications this year - a 12X increase from 1981. Other major registers saw filing activity triple or quadruple during that period. China’s numbers are even more remarkable, however, it experienced an extraordinary growth rate compared to other countries.

In 2018, CNIPA received 7 million trademark applications - roughly 270 times more than it did in 1981. The European Union Intellectual Property Office (EUIPO), created in 1996, has become the 8th largest trademark registry receiving 124,000 applications each year. For comparison, China receives that same number of filings every week. 1981 saw 26,000 applications in China; by 2018 that number had ballooned to over 26,000 trademark requests daily. In 2018, 10 million trademarks were registered worldwide, the majority of which (70%) originated in China. In 2010, China was the first trademark registry to receive one million trademarks. This increased rapidly in 2014 with two million applications and then surpassed three million by 2016. In 2017 they had 5.6 million filings and 7 million after CNIPA’s decision of halving filing fees effective April 2017 which contributed greatly to this growth rate

Chinese registrations doubled in the latter half of the year.

In 2018, Chinese individuals and companies filed over 140,000 trademarks outside mainland China. This figure is a notable increase from years prior and includes applications by Chinese brand owners in foreign markets:

The USPTO has received more than 50,000 applications (10% of the total) on its register. In 2018, more than 12,000 European Union Trade Mark (EUTM) applications were submitted to the EUIPO—more than those filed by US-based applicants with 11,000 EUTM apps. Japan received 7,500 applications.

WIPO received 6,500 applications for international registrations.

6,000 entries on the UK registry.

Despite the 2014 change allowing multiple classes to be included in trademark applications, growth remained steady due to most filings still only covering one class. As recently as 2018, over 98% of China’s trademarks covered a single class.

The tremendous rise in Chinese trademark activity, both inside and outside the country, is generally seen as beneficial. However, there have been warnings that this rapid growth may reduce the quality of these marks. Generally speaking, trademark filing corresponds to economic movements - when a nation’s economy rises or falls so does its IP registry activity.

US trademark applications correlate with Gross Domestic Product (GDP), as each application tends to represent around $50 million of GDP.

China’s situation is not the same. Although its economy has grown for two decades, a trademark there only holds about $7 million in GDP value or less since 2008, dipping to below $2 million at times. This means that Chinese trademarks are generally worth much less than American ones and this gap continues to grow wider.

The US, UK and Japan all had an average of over $33 million GDP per trademark application in 2018. Meanwhile, Brazil and India both produced nearly $10 million in total GDP with each new trademark registration.

Recent changes to the USPTO raise doubts about whether China’s extraordinary economic success is a positive one:

Chinese firms have increasingly been submitting US trademark applications directly, but there’s a potential requirement for them to use an American legal professional as their representative.

US trademark applications are checked with technology to make sure photos submitted as evidence of use aren’t edited.

The USPTO’s revised forecast for 2019/2020 is predicting minimal or even negative growth in filing volume, which contrasts sharply with the double-digit increases of prior years.

The USPTO appears to think foreign applications need better quality and some of the increase in trademarks registered recently has been a result that is not seen as good.

Early 2019 figures hint at a slowdown in Chinese trademark activity, both domestic and international. China’s current position is so strong that its 2018 results may remain the same for many years to come.